§ 1735f-19. — Partial payment of claims on defaulted mortgages and in connection with mortgage restructuring.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1735f-19]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER V--MISCELLANEOUS
Sec. 1735f-19. Partial payment of claims on defaulted mortgages
and in connection with mortgage restructuring
(a) Defaulted mortgages
Notwithstanding any other provision of law, if the Secretary is
requested to accept assignment of a mortgage insured by the Secretary
that covers a multifamily housing project (as such term is defined in
section 1701z-11(b) of this title) or a health care facility (including
a nursing home, intermediate care facility, or board and care home (as
those terms are defined in section 1715w of this title), a hospital (as
that term is defined in section 1715z-7 of this title), or a group
practice facility (as that term is defined in section 1749aaa-5 of this
title)) and the Secretary determines that partial payment would be less
costly to the Federal Government than other reasonable alternatives for
maintaining the low-income character of the project, or for keeping the
health care facility operational to serve community needs, the Secretary
may request the mortgagee, in lieu of assignment, to--
(1) accept partial payment of the claim under the mortgage
insurance contract; and
(2) recast the mortgage, under such terms and conditions as the
Secretary may determine.
(b) Existing mortgages
Notwithstanding any other provision of law, the Secretary, in
connection with a mortgage restructuring under section 514 of the
Multifamily Assisted Housing Reform and Affordability Act of 1997, may
make a one time, nondefault partial or full payment of claim under one
or more mortgage insurance contracts, which shall include a
determination by the Secretary or the participating administrative
entity, in accordance with the Multifamily Assisted Housing Reform and
Affordability Act of 1997, of the market value of the project and a
restructuring of the mortgage, under such terms and conditions as are
permitted by section 517(a) of such Act.
(c) Repayment
As a condition to a partial claim payment under this section, the
mortgagor shall agree to repay to the Secretary the amount of such
payment and such obligation shall be secured by a second mortgage on the
property on such terms and conditions as the Secretary may determine.
(June 27, 1934, ch. 847, title V, Sec. 541, as added Pub. L. 103-233,
title I, Sec. 101(e), Apr. 11, 1994, 108 Stat. 357; amended Pub. L. 105-
65, title II, Sec. 210, title V, Sec. 523(b), Oct. 27, 1997, 111 Stat.
1366, 1406; Pub. L. 106-74, title II, Sec. 213(a), Oct. 20, 1999, 113
Stat. 1073.)
References in Text
The Multifamily Assisted Housing Reform and Affordability Act of
1997, referred to in subsec. (b), is title V of Pub. L. 105-65, Oct. 27,
1997, 111 Stat. 1384. Sections 514 and 517(a) of the Act are set out as
a note under section 1437f of Title 42, The Public Health and Welfare.
For complete classification of this Act to the Code, see Short Title of
1997 Amendment note set out under section 1701 of this title and Tables.
Amendments
1999--Pub. L. 106-74, Sec. 213(a)(1), substituted ``defaulted
mortgages and in connection with mortgage restructuring'' for
``multifamily housing projects and health care facilities'' in section
catchline.
Subsec. (b). Pub. L. 106-74, Sec. 213(a)(2), substituted ``partial
or full payment of claim under one or more mortgage insurance
contracts'' for ``partial payment of the claim under the mortgage
insurance contract''.
1997--Pub. L. 105-65, Sec. 210(1), inserted ``and health care
facilities'' after ``housing projects'' in section catchline.
Subsec. (a). Pub. L. 105-65, Sec. 523(b)(1), substituted ``Defaulted
mortgages'' for ``Authority'' in heading.
Pub. L. 105-65, Sec. 210(2)(B), inserted ``or for keeping the health
care facility operational to serve community needs,'' after ``character
of the project,'' in introductory provisions.
Pub. L. 105-65, Sec. 210(2)(A), which directed the insertion, in
introductory provisions, of ``or a health care facility (including a
nursing home, intermediate care facility, or board and care home (as
those terms are defined in section 1715w of this title), a hospital (as
that term is defined in section 1715z-7 of this title), or a group
practice facility (as that term is defined in section 1749aaa-5 of this
title))'' after ``section 1701z-11(b) of this title'', was executed by
inserting the language after ``section 1701z-11(b) of this title)'' to
reflect the probable intent of Congress.
Subsecs. (b), (c). Pub. L. 105-65, Sec. 523(b)(2), (3), added
subsec. (b) and redesignated former subsec. (b) as (c).
